The money will go to the Natural Resource Trustees for the Deepwater Horizon oil spill, which includes the states of Louisiana, Alabama, Florida, Mississippi and Texas, the Department of the Interior and the National Oceanic and Atmospheric Administration.

The trustees will use the money to pay for projects such as rebuilding coastal marshes, replenishing damaged beaches, conservation of sensitive areas for ocean habitat for injured wildlife, and restoring barrier islands and wetlands.

Some of the money may also go to projects that support recreational fishing, such as public boat launches or docks, or fish hatcheries.

Louisiana and the other states will each be given $100 million. NOAA and the Interior Department also will be given an initial $100 million. The remaining $300 million will be divided between NOAA and Interior to be used for projects selected by them from proposals submitted by the states.

The first $500 million will be forwarded within 45 days, with a second $500 million provided in six months.

The projects must be approved by a Trustee Council that includes representatives of all trustees. The proposals also will undergo public review before final approval.

"BP believes early restoration will result in identified improvements to wildlife, habitat and related recreational uses in the Gulf, and our voluntary commitment to that process is the best way to get restoration projects moving as soon as possible," said Lamar McKay, chairman and president, BP America Inc.

"Our voluntary agreement to accelerate restoration projects builds upon the cooperative approach BP has taken toward working with Gulf communities and regulators since the accident, and in assessing the potential injury to natural resources. We believe the early restoration projects to be funded through this agreement represent the best way forward in restoring the Gulf."

"We are eager to continue working with public, state and federal co-trustees and BP to quickly convert this down payment into projects to restore our damaged coast and replace our lost wildlife," Jindal said. "We encourage BP to continue to address the damages from this spill through early restoration efforts."

The money will be deducted from the bill that will ultimately be presented to BP and other responsible parties after completion of the Natural Resource Damage Assessment process. At the end of that process, likely to take several years, the trustees will take into account any benefits realized from the early restoration projects.

"This milestone agreement will allow us to jump-start restoration projects that will bring Gulf Coast marshes, wetlands and wildlife habitat back to health," said Secretary of the Interior Ken Salazar. "This agreement accelerates our work on Gulf Coast restoration and in no way limits the ability of all the Natural Resource Trustees from seeking full damages from those who are responsible as the NRDA process moves forward."

The agreement also was praised by a wide range of environmental groups.

"This is a good day for the Gulf and a welcome first step on the long road to recovery and restoration for the region's environment and economy," said the joint statement by the Environmental Defense Fund, National Audubon Society, National Wildlife Federation, Ocean Conservancy, Oxfam America and The Nature Conservancy. "The BP oil disaster was unprecedented and BP's down payment toward Gulf restoration today is also unprecedented. Restoration of these threatened resources simply cannot wait."

The money will be set aside in a separate account within the $20 billion trust fund BP set up after the spill to pay for damages. If the fund runs short in its ability to pay other claims, the early restoration agreement requires BP to accelerate its payments to the trust fund or contribute more money.

The advance payment plan was proposed by Louisiana state officials last year as a way to reduce the wetlands damage they anticipated, and as a way for BP to limit its ultimate liability under the federal Oil Pollution Act, which makes companies liable for damages caused by oil they spill from the time of the spill until all of the effects have been mitigated.

Louisiana officials have repeatedly said the state should receive as much as 80 percent of the money from both the damage assessment process and from fines levied against BP and other responsible parties because the majority of oil that reached land ended up on Louisiana beaches and wetlands.

State officials expect to see more than the initial $100 million spent on Louisiana projects.

"Both the NOAA and Interior money have to be spent somewhere," said Garret Graves, Jindal's senior coastal adviser. Both agencies already are partners with the state in a long list of projects that could be financed with BP money.

Interior also could use its share of the money for restoration projects in national parks, or national wildlife refuges, including parts of the Jean Lafitte National Historical Park, the Breton Islands National Wildlife Refuge or Bayou Sauvage National Wildlife Refuge.

Graves said he expects a share of the last $300 million overseen by the trustees also to go to Louisiana projects.

"We have no pre-ordained projects," said Graves, who chairs the Coastal Protection and Restoration Authority. "Our plan is to finalize our Natural Resource Damage criteria, engage parishes and stakeholders and hold public meetings across the coast."

Louisiana already has allocated $14 million for projects aimed at restoring the effects of the spill, part of its public pressure on BP to agree to the early payment. About $10 million has been allocated from other restoration programs and is likely to be used to rebuild wetlands along Bay Jimmy and other parts of Barataria Bay, and an oiled sand spit at the southern end of South Pass.

Another $4 million was to pay to place oyster cultch -- shell material on which oyster larvae grow -- in public oyster beds that were decimated after the state opened freshwater diversions along the Mississippi River in an attempt to keep oil from going ashore.

However, the state also will have to compete with its neighbors, who also have been identifying restoration projects, and with the two federal agencies that will be focusing on damage caused by the spill to the deepwater environment, including corals about 20 miles north of the Macondo well, the Atlantic bluefin tuna that was spawning in the area of the spill last year, and a variety of other fish species and marine mammals and much smaller organisms that inhabit the water column between the well and the shore.

BP participates in the selection process by negotiating with trustees the credits they will receive for each project.

BP's decision met with praise from members of the state's congressional delegation, who noted they're still working to persuade their colleagues to direct most of the possible $5 billion to $21 billion in Clean Water Act fines to similar restoration projects, rather than the national treasury.